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“For many homebuyers, the biggest obstacle can be saving for a down payment,” said John Buccinna, VP of Residential Lending at Freedom Bank. Thanks to some new programs such as HomeReady and Home Possible, homeowners-to-be can get approved with as little as three percent down. Ideally, if you put 20 percent down, you avoid having to pay mortgage insurance all together. How long you plan to stay in the house, and what your goals are, will help you determine whether you should consider mortgage insurance alternatives such as lender paid mortgage insurance, and or whether you consider a fixed rate mortgage, versus an adjustable rate mortgage.
Before applying for a mortgage, it is wise to have personal finances in order. “People should prepare themselves, as every “I” gets dotted and every “t” gets crossed,” said Buccinna. This includes reviewing credit reports and clearing up any blemishes. A score of 740 and up will typically qualify for the best rates. Borrowers will need to provide a minimum of two year’s employment history, as well as bank statements for the previous two months. The government requires lenders to provide a good faith determination that the consumer will have a reasonable ability to repay the loan according to its terms. Gone are the No-Income Verification programs. “It may seem a bit more rigorous, but it is for all the right reasons,” said Buccinna.
To learn more about residential lending at Freedom Bank, visit their website.
